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doubt you've heard the radio commercial, you can claim a mortgage despite poor credit. Bad credit mortgages are better known as subprime mortgages.

Subprime

"Subprime" is a euphemism for a borrower who simply do not for a traditional home mortgage. Subprime loans are very hard to get, but it changed in the 1990s. The banks began to realize there was a lot of borrowers with less than stellar credit or other problems. More borrowers will mean more revenue, so that banks can create sub-prime mortgages and the game was. As a result of these new loans, home ownership in the United States has for all time highs.

One of the biggest factors for a loan is your credit score. A borrowers credit history is analyzed using a "FICO" Score, according to Fair Isaac and Company, Inc. Generally, a FICO Score below 620 is indicative of bad credit. The borrower is then classified as subprime borrowers.

Importantly, a FICO Score below 620 is not the only reason why a person can be considered as subprime. A rare borrowing history, new job or expensive home-button can also be called. In fact, nearly 50 percent of subprime borrowers have FICO above 620 points.

If a lender requires a mortgage, it is betting that the borrower the loan in full and in a timely manner. The better your credit score, employment history and so, the better you'll be by the lender. Obviously, subprime borrowers are not the best offer. Instead, a lender may be a larger down payment and will certainly be a higher interest rate than the "good" borrowers. In addition, subprime borrowers have to pay can only points to the loan.

The trading of all this, of course, is that you have a loan to purchase a home. Real Estate has proven itself as one of the best long-term investment in the United States. While Americans are criticized for not to save money, they are actually doing so through the purchase of homes and build equity in them.

If you opt for a subprime loan if you are less than stellar credit or other problems? There is no right answer, you should sit with an independent mortgage broker to analyze your situation.

Sergio Haros is with Great Western Mortgage - San Diego Mortgage Brokers - San Diego, the home loans. Great Western Mortgage is a San Diego mortgage company writing San Diego and San Diego mortgage refinance and home equity loans.